Meds and Eds as urban anchors: Economic prosperity, occupational shifts, and racial polarization in post-industrial cities

Source abstract

Meds and Eds are often seen as economic saviors for post-industrial cities because they attract a highly skilled workforce that drives economic prosperity. However, these anchor institutions face pushback for being a part of processes of race and class polarization and segregation. In this paper, we document associations between increased reliance on Meds and Eds between 2004 and 2019 and changes in occupation, income, and racial composition across U.S. metropolitan statistical areas (MSAs). Drawing on data from the Federal Reserve Bank’s Anchor Economy dataset, the American Community Survey, and the U.S. Occupational Employment and Wage Statistics, we examine the relationships between shifts in MSA-level reliance on Meds and Eds and occupation; median income across occupational classes; and racial demographics. Results from our analysis suggest that increased anchor reliance correlates with increased income across occupational groups, increased creative and management class employment, decreased working-class jobs, and no significant associations with service or agricultural employment. Demographically, we find that higher reliance on anchor institutions correlates with increased proportions of White and Asian populations and decreased proportions of Black and Latino populations. These results suggest that anchor institution-driven development may worsen occupational and racial disparities while fostering economic growth for high-skilled workers.